Just caught a major billing error with PNM's Itron smart meters here in Albuquerque. Large commercial customer on Schedule 6 was being charged for reactive power demand that doesn't exist in their tariff. The AMI system was measuring power factor correctly but the billing engine was applying a reactive demand charge of $8.50/kVAR for 18 months. Total overcharge was $12,400. PNM admitted the billing system error but claims it only affected "a small number of customers." Anyone else seeing similar issues with reactive power billing on AMI systems?
PNM smart meters calculating demand wrong - $12K overcharge discovered
MDU in North Dakota had reactive power billing issues with their smart meter rollout. The meters were accurately measuring reactive demand but their billing system was applying industrial rate charges to commercial customers. We caught it because a small office building was getting billed $400/month for power factor penalties when they only had LED lights and computers. MDU fixed the billing logic but it took 8 months and multiple complaints to the PSC.
Idaho Power's new AMI system has similar reactive power confusion. The Landis+Gyr meters measure everything - real power, reactive power, apparent power, power factor, harmonic distortion. But their billing system wasn't programmed to ignore reactive measurements for customers who don't have power factor clauses in their rate schedules. We found several small businesses getting charged power factor penalties when their tariffs don't even mention reactive power.
Georgia Power resolved their reactive power billing issues last year after similar problems. The smart meters capture so much more data than mechanical meters ever could, but utility billing systems aren't designed to handle it properly. We had customers on Schedule TOU-8 getting charged for reactive demand when only Schedule TOU-9 and above have power factor provisions. The solution was reprogramming the billing engine to ignore reactive measurements for certain rate classes.
PPL in Pennsylvania went through this exact issue in 2019-2020. Smart meters measuring power factor accurately but billing system applying reactive charges to customers who never had them before. The Pennsylvania PUC got involved and ordered PPL to refund overcharges plus interest. Total refunds were over $2.8 million across 15,000+ commercial accounts. Document everything and don't let the utility claim it's a "minor billing adjustment."
MLGW here in Memphis is planning smart meter deployment starting 2024. After reading about these reactive power billing disasters I'm going to recommend they do extensive billing system testing before going live. The old mechanical meters only measured kWh and peak kW - they couldn't measure power factor at all. Smart meters measure everything which creates new opportunities for billing errors if the software isn't programmed correctly. Prevention is definitely better than cleanup after thousands of customers get overbilled.